I would like to change my "paycheck to paycheck" way of life and am looking to learn about financial vehicles (US based) and investment basics, and anything else that "I wish I had known when I was 20 years old".Ask HN: Good resources to become financially literate
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Re: Ask HN: Good resources to become financially literate
#2I recently went through this myself after a long time of avoiding it due to the way I grew up (parents always argued severely about money - made me basically ignore it as it caused me extreme stress)
I have found the BogleHead guides [1,2] and wiki [3] the absolute best place to begin!
[1] The Bogleheads' Guide to Investing - https://a.co/d/ctdMwZj [2] The Bogleheads' Guide to Retirement Planning - https://a.co/d/19eZBsy [3] https://www.bogleheads.org/wiki/Main_Page
Re: Ask HN: Good resources to become financially literate
#3/r/personalfinance has some solid stuff in their sidebar/wiki.
I'm big into Financial Independence as a concept and community, so I'm partial towards that. Some recommended reading (some which you may like and some you may not):
- /r/financialindependence sidebar/wiki
- https://www.mrmoneymustache.com/ - Bit more radical on the frugality side but a personal favorite
- https://www.madfientist.com/ - Podcast and blog. Bunch of stuff on tax advantaged vehicles
- Your Money Or Your Life - Incredible book (foreward by MMM referenced above)
- YouTube/general searching for investment vehicles. Big ones in the US are: 401k, IRA vs Roth IRA, 403b, 529 (if you have kids). Tax advantaged accounts have huge benefits, so definitely understand them. Only takes a little bit to read about the ones I listed.
- Dave Ramsey - Love him or hate him, if you really struggle with money and debt on a fundamental level, he has good advice. His advice isn't optimal for everyone if you don't have issues with debt, but something to consider.
- Depends on how you want to invest. A lot of people (myself included) are pretty straight forward with index funds and diversify in different types, such as US vs international or maybe a variety of focus on industry. Do you research and figure out what's best for you, but index fund investing is pretty safe and easy.
Some personal advice:
- Spend less than you make. Seems obvious but it really is the golden rule of personal finance. Easier to say than do, especially without knowing your financial/life situation.
- Reduce any debt you have. High interest is obviously a big one and some people have varying levels of comfort with low interest debt (like mortgages from the past few years). Find what you're comfortable with, but just get rid of any credit card debt immediately. The chances you beat that interest rate with an investment is basically zero, and the limit as it approaches zero over multiple years.
- Think about the depreciation in your assets. Buying a new car means you eat the bulk of depreciation. There's an optimal point to buy a car where you get the most life for the best dollar after the depreciation is lost.
- If you're in software like a lot of HN, we're very lucky to have careers that pay well in most cases. Take advantage of that. Live on less, invest more, and be generous with others.
Re: Ask HN: Good resources to become financially literate
#41. An app called YNAB (You Need A Budget). They use the envelope system of budgeting and they have group classes you can join. Absolutely transformative.
2. Rich Dad Poor Dad
Re: Ask HN: Good resources to become financially literate
#5If you're living paycheck to paycheck I'd say learn to walk before you run. Keep it simple, open another account and transfer 20% or whatever you feel comfortable from every paycheck. After you save more than a year of living in that you can start to look into more advanced stuff.
Re: Ask HN: Good resources to become financially literate
#61. An app called YNAB (You Need A Budget). They use the envelope system of budgeting and they have group classes you can join. Absolutely transformative. 2. Rich Dad Poor Dad
Rich Dad Poor Dad should always be mentioned with the caviet that:
A) 99% of the book is fabricated
B) It's based on methods which are significantly harder to do in this day and age
The biggest takeaway from the book is the mental shift to assets and liabilities. But the anecdotal stories are pretty poor and, as I said, fabricated.
Re: Ask HN: Good resources to become financially literate
#7To me it seems like a lot of people enjoy having things more than being free and not having to worry about getting paid. Also 'spend less than you earn'. As simple as that - yet people struggle to follow this. It also boggled my mind to find that someone with masters degree believed they had money - despite it being cash withdrawn from a credit card. When challenged why do they not pay back their credit card - I heard it's the feeling of empty account, and that money is for -just in case-. Yeah, you are paying % monthly on that just in case, that you could get from a credit card if it really happened. That $ on the account also was affecting that person's spending habits - thanks to the avoidance the feeling of being out of money. Crazy - money illiteracy is real.
Re: Ask HN: Good resources to become financially literate
#81. An app called YNAB (You Need A Budget). They use the envelope system of budgeting and they have group classes you can join. Absolutely transformative. 2. Rich Dad Poor Dad
I second YNAB. It played a significant role in my financial responsibility in terms of budgeting and saving. YNAB is an excellent product.
Re: Ask HN: Good resources to become financially literate
#9If you're living paycheck to paycheck I'd say learn to walk before you run. Keep it simple, open another account and transfer 20% or whatever you feel comfortable from every paycheck. After you save more than a year of living in that you can start to look into more advanced stuff.
You should at least provide some motivation to do that.